Thursday, September 23, 2010

The new healthcare reform law turns six months old on Thursday, and with it come new key coverage requirements that go into effect. Healthcare consumers are more likely to feel the impact of these new measures, but healthcare providers could see some changes, too, such as more patients—including those with pre-existing or chronic conditions—seeking their services.

The rollout of these reform measures, though, may be confusing because their actual start date will depend on when a particular health insurance plan year starts, or when it started. While the new requirements go into effect Sept. 23, these requirements for health plans will be implemented when their actual year of coverage begins (such as Jan. 1, the start of the calendar year).

In addition, "grandfathered" plans--or those plans in existence before the healthcare reform legislation was signed into law— may have to meet only some of the requirements. Other plans—specifically new healthcare plans and those that make significant changes in benefits, deductibles, copayments, or share of premium contributions—will be required to comply with most of the law's changes.

Here is an overview of the provisions that take effect September 23:

Young adult coverage: Young adults can stay on or be added to their parents' health insurance plan through age 26. These young adults do not need to live with their parents and they can be married. However, that child's spouse or children is not required to be covered under the rule.

Grandfathered plans can exclude an adult child under 26 if that child is eligible to enroll in another employer-sponsored health plan, such as a plan through his or her job unless it is the plan of the other parent's employer. But, beginning in 2014, that exclusion will not be available to them.

Approximately 2.4 million young adults are expected to be eligible for coverage under their parents' plans. In 2011, roughly 1.24 million (using mid-range estimates) are anticipated to enroll for dependent coverage; this number is expected to rise to 1.6 million in 2012 and 1.65 million in 2013.

Coverage for sick children: Insurers are prohibited from denying coverage and treatment for children under age 19 with pre-existing medical conditions, such as asthma or cancer. This impacts group plans or "non-grandfathered" individual plans.

The plans can limit when children are signed up to certain open enrollment periods. Plans, though, are not required to sell policies individually to children. (Several plans in California, Illinois, Florida, and Connecticut announced in the past week that they will not be individually selling this particular coverage option.)

Preventive care: Plans must cover a wide range of recommended preventive services, such as immunizations, well-baby care, mammograms, and colonoscopies, while no longer charging co-payments, co-insurance, or deductibles for those services. This requirement applies, though, only to new plans—and not grandfathered plans.

Lifetime and annual coverage limits: This will impact those individuals with expensive and ongoing medical treatments. Lifetime limits are banned for all plans; for those who have hit their lifetime limits, they'll be able again to access coverage.

Those plans with annual limits on health benefits coverage will be phased out: Initially, the annual limit will be no less than $750,000, but it will rise to $1.25 million in September 2011 and $2 million in 2012. The annual limits are prohibited in 2014.

The annual limits apply to new individual and group plans, along with grandfathered group plans. They will not apply to grandfathered individual plans or to so-called "mini-med" plans that offer limited benefits.

Primary care and emergency care. Plans now must allow pediatricians and obstetrician/gynecologists to obtain primary care physician status: This will eliminate requiring patients to get prior-authorization from their insurers or a primary care physician to see a pediatrician or OB/GYN.

Also, emergency services can be provided without prior approval from the plan: insurers can't charge higher co-payments or co-insurance for using out-of-network ER providers.

Rescission: While the effective date was moved by insurers to May 2010, rescission—when an insurance company retroactively cancels a policy—is now banned, except when cases of "fraud or intentional misrepresentation of material fact" occur. Patients are required to be notified before cancellation. The provision applies to all types of health insurance plans.

Appeal rights: Patients will have the right to appeal insurers' decisions through their plans' internal review processes or independent, third-party reviewers. All health plan, except a grandfathered plan, must meet new standards. With urgent medical cases, the insurer must make a decision on the appeal within 24 hours—and has to continue covering the treatments while the appeal is pending.

Janice Simmons is a senior editor and Washington, DC, correspondent for HealthLeaders Media Online. She can be reached at jsimmons@healthleadersmedia.com.